The Goal The Race What is This Thing Called Theory of Constraints? The Haystack Syndrome: Sifting Information Out of the Data Ocean It's Not Luck

CRITICAL CHAIN
Eliyahu M. Goldratt

THE NORTH RIVER PRESS

Copyright 1997 Eliyahu M. Goldratt All rights reserved. No part of this book may be reproduced or utilized in any form or by any means,electronic or mechanical. including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the Publisher. THE NORTH RIVER PRESS PUBLISHING CORPORATION P.O. BOX 567 GREAT BARRINGTON. MA 01230 (800) 486-2665 Manufactured in the United States of America ISBN 0-88427-153-6

CRITICAL CHAIN

CRITICAL CHAIN Chapter 1
"This board meeting isadjourned," announces Daniel Pullman, the domineering chairman and CFO of Genemodem. The elegant conference room hums with conversation as the directors start to depart. The last quarter was the best in the history of the company. The directors are pleased, but no one is overly excited. They have come to expect it. For the past six years, almost every quarter has been better than the preceding one. "I wantto have a word with you," Pullman tells Isaac levy, smiling and continuing to shake the hands of the external board members. When everybody else leaves they sit down. "Have you had a chance to read McAllen's final report'?" Pullman asks. It was Levy, the executive vice-president of engineering, who had insisted on hiring a consulting firm to do an in-depth analysis of Genemodem's productdevelopment. The analysis was not restricted just to engineering, it covered the entire process. Starting with examining the way they decide on the features of a new modem, through the development process, and of no less importance, examining the way the new design is handed over to production and marketing. Not that they had been complacent. Embarking on new technologies, new tools, even new managementmethods is the norm in their company. You cannot be among the leaders otherwise. Nevertheless, Levy insisted on bringing in experts from the outside. "There must be many things that we take for granted," he had claimed. "Things that only outsiders are able to see." Pullman supported him fully. Actually, no one really objected. It was no small effort, and it did not come cheap, but at last, a weekago, they had received the four-hundred-page report. "I really think they've done a very good job. There are many things they point out that we overlooked. We got our money's worth and then some," Levy says. "Agreed. The report contains many good things. But I am concerned with what it does not contain. Isaac, if we were to implement everything they talk about, how much do you think our developmenttime would shrink?" "Hard to tell. Maybe five percent. Maybe not even that." "That's my impression as well. So, we explored every conventional avenue and, as we expected, the answer is not there." Pullman stands up. "There is only one thing left to do. Isaac, launch the think tank." "It's a long shot." Levy stands up as well. "Very long, but we are skating on very thin ice." On his way out,Pullman adds, "We must find a way to rectify it. We must." Isaac Levy looks at the three young managers sitting in front of his desk. He does not particularly like what he sees. They are not senior enough. All three are too young and too inexperienced for the task. But that was Pullman's decision. "Isaac," he had said, "a senior person is already engraved with the way we are doing things. If there issomeone who can find us a much better way, it's a young person. Young enough to be rebellious, young enough to be unsatisfied with our rules. Do you remember how young and inexperienced we were when we started? We broke every convention, and look at where we are now!" Isaac didn't see any point in reminding him that they also "succeeded" in running their first company into the ground. "Do you know...